Wednesday, March 21, 2007

What A Business Model!

A few years ago, when I was staying in Mumbai, I came across this fantastic information about how ingenuity of people can decieve the laws and rules. This was about the Mumbai local train transport system. Mumbai suburban railway system daily carries more than 6 million commuters on 3 corridors - central, western & harbour. 6 million commuters on these trains means that the task for the authorities is extremely difficult. Ensuring that all these commuters pay for the tickets is next to impossible for the railway authorities. The system to discourage ticketless travel has to rely on random ticket checking and the chances are that you will escape getting caught more often than not, while travelling without a ticket. However, if more and more people think that ticketless travel is harmless, the chances of them getting caught in the random check will obviously increase. This keeps the number of ticketless travellers in check.However, when there is DRM, there is piracy. Because supply reaches to demand (and not vice-versa). This happened in this case also.Some very intelligent traveller (and in Mumbai everybody is a local train traveller), came up with this brilliant idea. What he did defied this model of random checks. It works like this - if you are a daily traveller, then become a member of this organisation of local train travellers (or was that ticketless local train travellers?) by paying a sum of around Rs. 500 or so. By becoming a member, you receive a guaranteed ticketless travel. What you will have to do is just pay whatever fine authorites charge - IF YOU GET CAUGHT WHILE TRAVELLING WITHOUT A TICKET. Once you pay the fine, go to the organisation's office(?) and show the receipt. You will get 100% refund.Now, what can be the chances that a passenger who travels for 365 days getting caught in a random check, if he is among 6 million or so fellow passengers?

Update: A few years ago, the fine for travel without ticket was just Rs. 50 [about a US Dollar], plus the charge of ticket, which is minimum - about 0.2 $ for almost 30 km of travel. Around 2002, the fine was increased fivefold, to Rs. 250.This is a considerable increase, for the passengers who are habituated to a Rs. 50 fine. However, what minimizes the disincentive of the fine is the system of random checks. For the passengers who are travelling daily, in these trains, for years, it is extremely difficult for ticket checkers to catch them unaware. One of these daily travelers told me that the passengers even know when the TC’s [that’s what the ticket checkers are called] would be coming. The dates are around middle of the month – from 14 to 17, and at the end of month- around 26 to 30/31. Further, the coaches being extremely crowded, the ticketless travelers can easily escape, when they come to know that the TC’s are there. On these occasions the passengers even enter into rather rare camaraderie against the system and help fellow passengers.This all actually means that a passenger would say that he even doesn’t need the Rs. 500 membership of the so called ‘ticketless travelers’ association’, because he just would never be caught even in random checks. This can be the reason, why this association, fortunately, never achieved its true menacing potential.